Network International Reports Record Revenue and Net Profit Growth
March 9, 2023 – Network International (Network), the leading enabler of digital commerce across Africa and the Middle East, today announced its preliminary financial results for the year ended 31 December 2022.
Network reported total revenue of USD 438.4 million up 24.5% compared to the previous year led by stellar performance in its Merchant Services business, which grew its revenue by 41.4% year on year. Consequently, underlying EBITDA increased to USD 178.6 million, supporting margin expansion of 240bps to 40.7%, reflecting the company’s largely fixed cost base. Net profit for the year was USD 80.1 million, up 41.6% year on year driven by the company’s robust EBITDA performance.
Network made strong progress with its geographic expansion, launching processing solutions in Saudi Arabia. The company completed its technology deployment in the Kingdom and signed four new financial institutions (FI), bringing its total customer numbers to six, providing a solid underpin to its medium-long term revenue target for the Kingdom of USD 50 million. Additionally, Network has initiated the process to provide merchant payment services in Saudi Arabia and has successfully received in-principle approval for Major Payment Institution Category license from the Saudi Central Bank (SAMA). This will further expand the company’s revenue opportunity in Saudi Arabia.
Network also launched direct-to-merchant payment services in Egypt in January 2023, adding to its thriving Acquirer and Issuer Processing business which serves over 20 FIs. The company’s focus is on the SME segment, where it seeks to replicate its success in the UAE.
The company’s share buyback programme of USD 100 million is expected to complete during 2023. USD 40.6 million was repurchased during 2022, and USD c13 million to year-to-date, with a further USD c47 million to complete.
Abdulaziz Al-Dahmash, Managing Director – Kingdom of Saudi Arabia, commented:
“We made exceptional progress in Saudi Arabia with strong demand for our processing solutions services, following our launch earlier in the year. The Kingdom is an extremely important strategic market for Network, as we seek to play a key role in supporting the nation to achieve its Vision 2030 target of c70% digital payments participation. With a strong customer base and a growing pipeline, we are well on the way to achieving our medium-long term revenue target of USD 50 million. We expect our revenue opportunity to expand even further, as we embark on the next stage of our journey in Saudi Arabia, having already initiated the process to provide merchant payment services.”
Nandan Mer, Chief Executive Officer, commented:
Cash generation was strong, which has supported shareholder returns through the launch of a USD 100 million share buyback programme, whilst retaining our flexibility to take advantage of additional growth or acquisition opportunities.
We thank our colleagues and customers for their support and delivery of such a strong outcome. The year ahead holds many growth opportunities, supported by our scale, capabilities, people and trusted brand.”
Merchant Services growth of 41.4% with record signups and strong performance in the UAE
Network’s Merchant Services business significantly increased revenue to USD 183 million in 2022, up 41.4% compared to the previous year as the total value of payments processed (Total Processed Volume (TPV)) by the segment in the Middle East, primarily consisting of the UAE, increased 28.9% year on year.
Domestic TPV increased 20%, driven by strong consumer confidence as the UAE’s economy remains robust in a challenging global backdrop and International TPV surged 64% with the country witnessing rapid tourism growth after hosting several landmark events during the year.
Network’s strategic focus areas deliver rapid growth with Online TPV and SME TPV substantially increasing by 39% and 41%, respectively, as Network signed a record number of new merchants, primarily driven by the SME sector. This significant achievement was supported by the launch of digital onboarding, low-cost mobile phone app payment acceptance and the web-store builder associated with its ‘DPO Pay’ package. The company also continues to attract new large merchants, securing Anantara, Taj Tower Hotel Group, Talabat, Audemars Piguet, and Western Union, amongst others.
Outsourced Payment Services growth of 13.3% supported by new customer wins and cross-selling
Network’s Outsourced Payment Services revenue increased 13.3% year on year to USD 243 million in 2022, supported by the addition of 18 new FI clients, with the rollout of new APIs supporting the automation of customer onboarding. The company also renewed six notable existing contracts and expanded portfolios with customers through successful cross-selling. Consequently, transaction volumes increased by 32.1% year on year and credentials managed increased by 8.4%.
Network reached a new milestone with its largest customer Emirates NBD by signing a new strategic Acquirer Processing partnership to provide merchant acquiring services to a number of the bank’s institutional clients in the UAE through white-labelled services. The partnership will also extend to SME merchants through a referral agreement.
2023 outlook and financial guidance
Network retains a positive outlook for the year with its core markets rapidly transitioning towards digital payments at a pace significantly ahead of more developed economies. The company expects revenue growth in the high teens for 2023 in constant currency, with EBITDA margins slightly ahead of 2022.
Last Updated on 2 years by News Desk 2
